A Project On Working Capital Management or Fund Management

EXCUTIVE SUMMARY INDUSTRY PROFILE
Cement industry has been decontrolled from price and distribution on 1st march and de-licensed on 25th July 1991. However, the performance of the industry, the constraints faced by the industry are interviewed in the infrastructure co-ordination committee meeting held in the cabinet secretariat under the chairmanship of secretary.. The industry is subject to equality order issued on 17-02-2003 to ensure quality standards. The Cement industry occupies a position of predominance not only an infrastructure for development but also it is 8th largest in the world,
COMPANY PROFILE
The company zuari Agro Ltd was in corporate on 12 th may 1967 zuari cement limited has been himself off as a separate company with 50-50 share holding by Zuari industries limited (A.K.K.Birla group company) and Italy cement group (as Italian cement company) with effect from 1-4-2000 with Head-quarters at Banglore, Zuari and Italy cement group (through cement Francis group company) have formed joint venture company Viz., Zuari cement limited. It is projected to increase the cement capacity of 2.2MT.
Need For The Study

One of the most important techniques of financial analysis is a preparation of funds flow statement. It is statement, which portrays the changes in the financial position of an enterprise. Balance sheet and income statement even if placed side by side in that much clarity as the statement of changes in financial position, which focus on the sources and uses of funds.
Objective Of The Study

To study the liquidity position of the company. To calculate and compare the operating cycle duration of the company over the study period. To analyze the inventory turn over performance of the company over the study period.
Working Capital Management -1-
To analyze the management of working capital that required for smooth running of the firm.
RESEARCH METHODOLOGY:
Research Design : Data Sources : Analytical Study Secondary Data
Secondary Data
The secondary data was collected form already published sources such as annual reports, returns and internal records.
The data collection includes:

a. Data collected from annual reports of Zuari Cement Limited., b. Reference form textbooks relating to financial management.
RESEARCH TOOLS:
Working Capital Management. Current ratio Quick ratio Debtors turnover ratio Inventory stock turnover ratio Cash ratio Operating ratio Creditors payment period days Debtors collection period Current assets to sales ratio Inventory turnover period days Creditors turnover ratio Debtors turnover ratio
Working capital turnover ratio Working Capital Management -2-
FINDINGS:
Note: 1. From the year 2005-2009 the zuari cement industry current ratio is 2.327, 2.734 , 1.884,0.963,1.512.From the first year of the current ratio is satisfactory above three year the current ratio is less than 2:1 it indicate that the firm doesnt have liquidity position . 2. During the year 2005-09 the quick ratio of the zuari cements is 1.63, 1.94, 1.61,0.72, 1.33.from the first 3 year and last year was satisfied but 2008 year was not satisfy. 3. During the period 2005-09 the cash ratio position of zuari cement was 0.36, 0.35, 0.82, 0.18, 0.86.the standard cash ratio is 0.5:1. regarding in the year 2007 -0.8,20090.9 and the reaming year 2005-0.36,2006-0.35 and 2008 0.2 .it explain that 2007 and 2008 the firm is the having the liquidity position and during year 2005 ,2006 and 2008 the firm doesnt have the minimum standard ratio of liquidity position . 4. From the year 2005-4657.09,2006-6803.46,2007- 12829.92, 2008926.04,and 200912499.65. it indicates that from the year 2005-2007 The net working capital is increased, in the year 2008 the firm doesnt have the net working capital and in the year 2009 the firm they recollects the net working capital. 5. Higher the debt equity ratio indicates in flexibility of operation. During the year 2005-2009 the debt equity ratio is 0.42, 0.38 0.07, 0.05, and0.03. the debt equity ratio of zuari cements is decreases from the year 2005-2009 it implies that the firm in the position of flexible operation. 6. During the year 2005-2009 the debt ratio of 0.70, 0.72, 0.78, 0.88, and 0.97 increased. The firm having the higher debt ratio for 2005-2009. 7. In the zuari cements from the 2005-2009 the liability ratio is increases it indicates tha insufficient utilization of asset value
8. During the year from 2005-2007 the capital employed to net worth ratio is 0.593, 0.594, 0.898,and apart two years of 2008-0.557and 2009-0.5386 capital employed to net worth ratio is decreases. 9. The inventory turn over ratio shows how rapidly the inventory is turning into receivable through sales a high inventory turn overt is indicative of good inventory management. In zuari cement from the fast two years the inventory management is not well in position the remaining three years 2007-34013, 2008-39097, 2009-46.3 increases. In the three years zuari cement inventory management is well in position. 10. The Among the year 2005-09 the working capital turn over ratio of the firm is fluctuate from the first year it may acquire better position and the next year it was decrease and in the year 2008 it will go to losses and then it will recollect its position in the year 2009 11. Among the year 2005-2009 the fixed asset turn over ratio of the firm is increased from the first four years and then the nest year 2009 it may decreases. From these the previous year the firm may not satisfied. 12. During the year 2005-20009 the total asset turn over ratio of the firm is increased rapidly then the firm got better position in the year 2009-10.0582 then the previous four years. Finally the total asset turn over ratio of the firm is satisfactory level. 13. During the year 2005-2009 the debtors turn over ratio is fluctuated in the year 2005 it was not satisfied and 2006 it may got high turn over with the 50.606 and again it was decrease in the year 2008. it was un high turn over with 52.168 and again its may leads to unsatisfactory level. 14. Higher the operating profit ratio performance in zuari cement is increased rapidly from the year 2005-09 with 99.3018,99.6440,99.6906,99.6633,99.6643 fjrom these the firm may satisfied with these operating profit ratio. 15. From the year 2005-09 the current asset turn over ratio from the 3 years 2005-07 is decreased and it again recover in 2008. it increases with 5.6706 and again decreases in 2009-3.280. 16. From the year 2005-2009 the firm may fluctuated position in the beginning year the satisfactory level of the firm is low and then it will recollect its position from the next four years it may got the better position the firm is satisfied. Working Capital Management -4-
17. During the year 2005-2009the net profit ratio of zuari cements is fluctuated in the year 2005 the capacity of the net profit ratio 5.2768 and then it decreases in 2006. in the year 2007 the firm got highest net profit ratio then the previous two years and again the nest two years2008 and 2009 it may some what decrease.. 18. Higher the operating expense ratio indicates in inefficient performance firm operation if operating excess increases the from losses their working capital in the zuari in the year 2005.the operating expenses ratio is 0.6982 and the remaining years i.e 20062009. the operating expenses ratio is decreases it indicates that the firm performance is well in their operations . 19. Higher the operating prfit ratio performance in zuari cement is increased rapidly from the year 2005-09 with 99.3018, 99.6440,99.6906, 996633,99.6643 from these the firm may satisfied with these operating profit ratio. 20. Wealth maximization is the one of the most important objective in the financial management in zuari cement a share holders equity is 2005-0.049,2006-0.052,20070.21,2008-0.462 increase and in the year 2009-0.396 the share holder equity will decreases 21. Higher the earning per share value is indicate well performance of firm operation from the year 2005-2009 the zuari cement earning per shares value is fluctuated
SUGGESTIONS
1. The Company should maintain minimum idle working capital and ultimately it reduces interest burden of organization and it will help to improve profitability of the organization. 2. It is suggested to company to maintain good relationship for creditors to pay the credits with in period. It helps to increase the funds by the creditors. 3. Better utilization of sources of funds is suggested for getting maximum benefits.
INDUSTRY PROFILE
INTRODUCTION:
Cement is a key infrastructure industry. It has been decontrolled from price and distribution on 1st March 1989 and deli censed on 25th July 1991. However, the performance of the industry and prices of cement are monitored regularly. The constraints faced by the industry are reviewed in the infrastructure coordination committee meetings held in the cabinet secretariat under the chairmanship of secretary (coordination). The cabinet committee on infrastructure also reviews its performance. Cement industry is one of the major and oldest established manufacturing industries in the modern sector of Indian economy. It is an indigenous industry in which the company is well endowed with the necessary raw materials, skilled manpower and equipment & machinery technology. Cement is required by firms, bridges, buildings, water supply projects, dams, roads, hydroelectric power projects, seaports, airports, and irrigation schemes. It is thus a vital industry which assumes a crucial part in the economic development of the country.
RAW MATERIALS:
The basic raw material for manufacturing cement is limestone. This is available in plenty in the form of limestone deposits in the nature. Limestone is excavated for mines by mechanical equipment with the help of stocker & reclaimed the correct. The raw materials consist of limestone, iron ore & bauxite. The correct proportions are fed into a grinding mill where they are reduced to a very fine of compressed air. The power from the storage ribs is fed into rotator kiln; the material is subjected to a temperature is about 1500c. chemical reaction takes place between the various materials resulting in the formation of cement compound like Tricalcium silicate (about 24%), die calcium silicate (about 20%), Tri calcium alumina (about 7 to 10%) and aluminum ferrate (about 10 to 12%).
CAPACITY AND PRODUCTION:

The cement industry comprises of 125 large cement plants with an installed capacity of 148.28 million tones and more than 300 mini cement plants with and estimated capacity of 11.10 million tones per annum. The cement corporation of India, which is a central public sector undertaking, has 10 units. There are ten large cement plants owed by various State governments. The total installed capacity in the country as a whole is 159.38 Working Capital Management -7-
million tones. Actual cement production in 2002-03 was 116.35 million tones as against a production of 106.90 million tones in 2001-02, regarding a growth rate of 8.84%. Keeping in view the trend of growth of the industry in previous years, a production target of 126 million tones has been fixed for the year 2003-04. During the period April-June 2003, a production (provisional) was 31.30 tones. The industry has achieved a growth rate of 4.86% during the year.
EXPORTS:
A Part from meeting the entire domestic demand, the industry is also exporting cement and clinker. The export cement during 2001-02 and 2003-04 was 5.41 million tones and 6.92 million tones respectively. Export during April-may, 03 was 1.35 million tones. Major exporters were Gujarat Ambuja Cement ltd. and L&T ltd.
RECOMMENDATIONS ON CEMENT INDUSTRY:

For the development of cement industry Working Group of cement industry was constituted by the planning commission for the formulation of X five year plan. The working group has projected creation of additional capacity of 40-62 million tones mainly through expansion of existing plants. The working group has identified following thrust areas for improving demand for cement. Further push to housing development programmers Promotion of concrete Highways and roads; and Use of ready-mix concrete in large infrastructure projects. Further, in order to improve global competitiveness of the Indian cement industry, the dept. of industrial policy & promotion commissioned a study on the global competitiveness of the Indian cement industry. The report submitted by the organization has made several recommendations for making the Indian cement Industry more competitive in the international market. The recommendations are under consideration.
TECHNOLOGY CHANGE:
Cement industry has made tremendous strides in technological up gradation and assimilation of latest technology. At present 93% of the total capacity in the industry is based in modern and environment-friendly dry process technology. There is tremendous scope for waste heat recovery in cement plants and there by reduction in emission level. One project for cogeneration of power utilizing waste heat in an Indian cement plant is being implemented with Japanese assistance under green Aid plan. The induction of advanced technology as helped the industry immensely to conserve energy and fuel and to save materials substantially. India is also production different varieties of cement like ordinary Portland cement (OPC), Potland Pozzolana cement (PPC), Portland Blast Furnance Slag Cement (PBFS), Oil Well Cement, Rapid Hardening Portland cement, Sulphate resisting Portland cement, While cement etc. Production of these varieties of cement conforms to the BIS Specifications. It is worth mentioning that some cement plants have set up dedicated jetties for promoting bulk transportation and export.
Ital Cement Group: OUR MISSION:Our shared ambition: Effective and Efficient To become the most effective and most efficient cement manufacturer and distributor in the world.
OUR APPROACH: We are local, we think global

Cement aggregates and ready mixed concrete manure and distribution are local business. Around the world we serve local customers in local market with local needs.
OUR WAY OF WORKING: Technological leadership is our goal,

Our technology plays the key role in realizing our ambition we are committed to increasing the value of our group, our companies, our products and services, the capabilities of our employees and the ecological standards by which we operate.
OUR SPIRIT: One team worldwide.

We operate worldwide in many diverse markets, culture and continents. We are proud of our cultural diversity and our distinctions character.
HISTORY OF CEMENTS:
1. Invention of cement of JOSEPH ASPARIN. Leeds builder in bricklayer. 2. 21st October, 1824 patented as Portland cement. 3. 1904 itish and American standards of Portland cement. 4. 1912 Indian cement company limited established factory at Portlander. 5. 1951 Indian standards.
DIFFERENT TYPES OF CEMENT:

There are varieties of cement based on different compositions according to specific end uses namely Ordinary Portland Cement, Portland Pozolona cement, Portland Blast furnace slag cement, and specialized cement. The basic difference lies in the percentage of clinker used.
ORDINARY PORTLAND CEMENT:

OPC, popularly know as grey cement has 95% clinker and 5% of gypsum and other materials. It contains for 56% of the total consumption. White cement is a variation of OPC and is used for decorative purposes like rendering of walls, flooring et. Contains a very low proportion of oxide.
PORTLAND POZZOLONA CEMENT:

PPC has 80% clinker, 15%pozzolona and 5% gypsum and accounts for 18% of the total cement consumption. Pozzolona has siliceous and aluminous materials that do not possess cementing properties in the presence of water. It is cheaply manufactured because it uses flyash / burnt clay/ coal waste as the ingredient. It has lower heat of hydration, which helps in preventing cracks where large volumes are being cast.
Working Capital Management - 10 -
PORTLAND BLAST FURNACE SLAG CEMENT (PBSFC):

PBSFC consist of 45% clinker, 50% blast furnace slag and 5% gypsum and accounts for 10% of the total cement consumed. It has a heat of hydration even lower than PPC and is generally used in construction of dams and similar massive constructions.
RAPID HARDENING PORTLAND CEMENT:

It is similar to OPC, except, that it is ground much finer, so that casting, the compressible strength increases rapidly.
Water proof cement

OPC, with small portion of calcium separate or non- saponifiable of to impart waterproofing properties.
CEMENT INDUSTRY INDIA OVERVIEW

1. Indian cement industry data back to 1914-first unit was setup at proddatur with a capacity of 1000 tones. 2. Currently India is ranked second in the world with an installed capacity of 114.2 million tones. 3. Current per capita consumption-85 pages. Against world standard of 256 kgs. 4. Cement grade limestone in the country reported to be 89 bt. A large proportion however is unexplainable. 5. 55-60% of the cost of production is Govt control. 6. Cement sales primarily through a distribution channel. Bulk sales account for < 1% of the total cement produced. 7. Ready mix concrete a relatively nascent market in India. Working Capital Management - 11 -
CEMENT INDUSTRY: STRUCTURE

Installed capacity 114.2 mn tones per annum Production around 87.8 mn tones.
Major cement plants

Companies:59 Plant: 116 Typical installed capacity for plant: Above 1.5 mntpa. Total installed capacity: 1.05 mntpa Production 98-99:81.6 mntpa Excise: Rs 408 tones
Mini cement plants

Nearly 300 plants Located in Gujarat, Rajasthan, MP.AP Typical capacity < 200 mntpa installed capacity around gmm. Tones Production around : 6.2 mn tones/mntpa Excise : Rs 250/ tone Mini plants were meant to tap scaterred
limestone reserves. All India reach through multiple plants However most set up in A.P. Export to Bangladesh, Nepal, Srilanka, UAE Most use vertical Kiln technology and Mauritius Strong marketing network, tie up with Production cost/ tone- Rs 1,000 to 1,400 customers, contractors Wide spread distribution network Sales primarily through the dealer channel Infrastructural facilities not to the best
However, cement consumption per capita in our country at about 99-kg/ capita is one of the Lowest. The world average is about 267 kg/ capita. While that of china is 450 kg / capita. Similar in Japan its 631 kg/ capita while in France it is 447 kg / capita.
Production:
1. Excess capacity exists, through some units are sick. 2. 1999-2000 production expended to reach 95 mn tones 3. Exports around 2 mn tones. 4. Cement manufactured through the wet, semi-dry or process. Working Capital Management - 12 -
5. Dry process accounts for 90% of the installed capacity. 6. Wet process popular in the past- better control over mixing of raw materials. 7. Dry process replacing the wet process as it is space saving energy efficient and economical.
Prices
a. Price fluctuations. b. Essentially determined by demand. c. Prices also vary with grades
AVERAGE MAXIMUM RETAIL PRICE Delhi

Aug 1999 Sep 1999 Oct 1999 Nov 1999 Dec1999 Jan 2000 137 137 136 136 128
Calcutta
146 139 125 125 117 120
Chennai
175 175 175 172 160 140
Bangalore
170 161 161 140 136 136
1. Over 370 companies in the organized sector. 2. However, industry dominated by 20 companies who account for ever 70% of the market. 3. Individually no company accounts for over of the market.
Manufacturing Process:
Cement is manufactured by using the wet , semi dry and processes. The wet process was popular in the past as it provided better control over materials mixing process. Working Capital Management - 13 -
However, the dry process has now gained popularity globally because it is space saving, energy efficient and economical.
CAPACITY DISTRIBUTION AND CONSUMPTION NORMS Process

Dry Semi-Dry Wet Total
Capacity (TPD)
282486 13910 5260 301656
Power % of total
93 5 2 100
Fuel Kcal/kg
750-800 900-1000 1300-1600
Kwh/MT
120-125 115-120 110-115
GEOGRAPHICAL DISPERSION
Limestone is the most important material input into cement manufacture. The plant locations are primarily determined based on the proximity of cement grade limestone deposits. These limestone deposits have been classified as cluster, some of which overlap two states.
PRODUCTION CAPACITY
Cement plant with a capacity of up to 0.3 mn tpa are classified as mini cement plants and are eligible for concessional excise duty. Though the minimum economic size of a cement plant is 1 mn tpa, there are over 300 white and mini cement plants in India a collective capacity of only 9 mn tpa (8% of the total domestic installed capacity). Most of the new cement plants being set up have a capacity of 1 mn tpa or more. The average cost of setting up a mini cement plant is about Rs 1400 per ton, while for large cement it is about Rs 3500 per ton.
Ready mix concrete: Industry

1. RMC-ready to use concrete, a blend of cement, sand and aggregate and water mixed in convenient proportion. 2. Launched first in Mumbai a few years ago is gaining in other metros in India. 3. Typical cost of a plant- Rs. 7.8 crs (US $ 1.6 to 1.8 mn ) to set up a 100 cubic meter (cum) plant with 4-5 transit mixers. Gestation period is around 3-4 months Working Capital Management - 14 -
4. Currently RMC is at a very nascent stage, accounts for 0.5% of the demand.
Company
ACC RMC Ready mix L&T Fletcher Challenge HCC Unitech Jog Construction Starmnac Madras Cement Birla Cement
No of plants
13 4 5 3 2 2 1 1 1 1 Three units of ACC to be commissioned
Capacity ( cu m/hr)
712 440 330 320 240 150 120 120 56 30
Companies planning to enter this Market.

1. Priyadharshini Cements in Hyderabad. 2. Saurashtra Cements in Navy Mumbai. 3. Pioneer a world leader entering the market 4. Capacity additions expected in the next few years 5. ACC plans to treble its capacities. 6. Grasim is setting up four more plants. 7. L & T plans to add another eight more.
Concerns
Cement industry going through a consolidation phase in the last few years. Working Capital Management - 15 -
Transportation
1. Transportation costs high-freight accounts for 17% of the selling and distribution cost. 2. Road preferred for transportation for distances less than 250 kms. However, industry is heavily dependent on roads are the railway infrastructure is not adequate shortage of wagons.
Capacity additions
1. Acquisitions have been the mainstay of the business. 2. Regional imbalance resulting in cross regional movement-limestone availability in Pockets has led to uneven capacity additions. 3. Capacity additions have slow down.
Industry inputs
1. Highly capacity intensive industry. 2. Nearly 55-60% of the inputs controlled by the controlled. 3. Facing problems due to power shortage. 4. Coal availability the quality affecting production. 5. Mini plants realization of the revenue lower large plants, survival difficult.
Future out look

Most economic forecasts for the Indian cement industry indicate a favorable outlook for the Indian cement sector. With no significant addition expected, the supply demand position is expected to the better balanced. Retail housing segment is expected to show significant demand growth over the next two year. With the industrial production showing an Working Capital Management - 16 -
upward trend, housing construction showing a sign so revival and the government gearing up to spend more on infrastructure, the sector looks favorably poised. The overall demand growth is expected to about 7-8 per cent. Withdrawal of sales tax benefits for the new units will give an added push to consolidation via acquisitions. Consolidations will be more regional, with companies seeking to gain dominance in their chosen regions. Indias per capital cement consumption is less than 100 kg compared to the world average of 250 kg. Currently, the total cement demand in India is lower than the total capacity. The cement manufacturers association of India projects a demand of 101 mn taps in 2000-01 as against 93 mn yap last year. Against this, the total installed capacity is 109 mn tap. However seven million tones of Cement Corporation of India and two million tones of UP cement are lying ideal. An 8-10 per cent growth is projected in the coming years, which will take the demand to 200 million tones in 10 years. A focus on more value added products likely Ready Mix Concrete (RMC) is emerging. RMC is a compound in which sand, gravel additives and water are added to cement and sold as readymade concrete. Cement products benefit from RMC production as it involves low capital expenditure. The cost of setting up a 100 metric cube per hour plant is in the range of Rs 70 to 90 mn. While the central government has declare a zero excise duty on RMC, the Maharashtra government has made it mandatory to use RMC in construction of ll the flyovers. With these measures, the total; RMC consumption is expected to touch 6 per cent of total cement capacity in next four year. To tap is existing potential, leading cement manufacturers in the country like L & T and ACC have already announced their plans to expand their RMC capacities is coming years. Next cost cutting measure appears to be transporting bulk cement. This method is cement transpiration is preferred by cement manufacturers as it results in lower packaging costs, hence lower demurrage costs. At present, cement is predominantly sold in 50 kg bags. But the pattern appears to the changing as cement manufacturers have increasingly started selling cement in bulk, especially in cities where construction activity as it is peak. Most of the cement sold in bulk is currently used by the ready mix concrete plants. Cement consumed in bulk could help save about Rs 110 per tone (Rs 5.50 per 50 kg bag) compared to the use of conventional bags. Around the world, almost 80% of the cement transportation is carried out in bulk form. But in India, only about 1%of total cement is transported in this form. This is Working Capital Management - 17 -
because of the attendant problems like inadequate infrastructure in the form of port facilities and lack of timely availability of wagons from the railways. Cement packaging costs accounts for nearly 4 per cent of total costs for a cement manufacturer. The industry will see more action on the mergers and acquisition front. So far, the market has seen only two major international players. Lafarge and Cement Francais, in action. But others, such as CEMEX and the big daddy, Holders Bank are waiting in the wings
COMPANY PROFILE
This cement division project in 1978 and according to the Texmaco it has taken the steps for acquiring the land at YERRAGUNTLA in KADAPA dist. in 1982. Constructing activity is started and the cement plant is completed in March 1985. Texmaco is started production at clinker by March 1985. Original plant capacity was 5 lakh tones per annum at first. The Zuari cement is strategically located at Yerraguntla. The plant location existence of 6km from Yerraguntla. It is connected to the railway station on by a railway track of 7 km length and is having on exchange plant inside the factory; plant is connected to the nearest highway by 0.2 km land private load. Basically this is belongs to DR.K.K. Birla. In 1994 January 1, this cement unit of Texmaco being handed over to Zuari agro chemical industry. Under working agreement on 7-2-95. This unit is sold by Texmaco to Zuari in 1997 company has conceives expansion project investing 370 crores and making increasing rated capacity from 5 lakh to 7 lakh. This project was completed by formally 1999 and in fact from 1-4-2000. Company entered in agreement with joint venture partner with Italy cement with 50% of partnership and working agreement. The Group has strength of 22,300 employees worldwide. 62 cement plants. 14 Grinding Units. 4 stand alone terminals. 147 aggregate quarries. Working Capital Management - 18 -
575 concrete batching units. Part of the prestigious Dr.K.K.Birla Group a Rs 4000 crores conglomerate Zuari cement as within a short time span made its presence felt in the cement industry. It has done so by making top quality cement. Consistently, Cement that has won the confidence and trust of millions in the country. This commitment to quality has being it grow from a modest 0.5 million ton capacity in 1995 to 2 million tons today. Zuaries quality drive originates in its state of the are cement plant, situated at yerraguntla, Renewed for rich Narji limestone deposits, this plant is cement manufacturers envy. Yet, strategic location is just factor contributing to Zuaries success. There are other equal important reasons. Superior work force. Cutting-edge technology. Decentralized quality assurance teams. All this combine seamlessly to ensure that every bag og cement. That leaves the plants is of consistent quality, and worthy of bearing the zuari label. World Wide excellence with italcementi group. Zuari industries ltd has entered into 50:50 joint venture with italcementi group, the largest producer and distributer of cement in Europe and one of the leaders in cement production in the world. Italcement operates in 19 countries including Canada, France, Italy, Morocco, USA and Bulgaria. Italic cements global industrial network includes more than 50 cement plants, 500 concrete batching units 150 quarries. Zuaries joint with italcementi gives Sri Vishnu cement a global technological advantage which reflects in finesses of every grain of Sri Vishnu cement.
History of zuari cements:

Zuari cement was started in 1994 to operate the cement plant of Texmaco Ltd. Subsequently, Texmacos cement business was taken over by the company in 1995.
Zuari cements manufacturing facility at yerraguntla in Andhra Pradesh is one of the largest in south India and places Zuari cement among the top 5 manufacturers in the south. In 2000, Italcementi group the second largest producer and distributor of cement in Europe and fifth largest cement producer in the world enter into a joint venture with Zuari cement and Zuari cement Limited was formed.
COMPETITORS:
1. 2. 3. 4. 5. 6. CORAMANDAL CEMENT PENNA CEMENT NAGARJUNA CEMENT DALMIA CEMENT ULTRATECH CEMENT PRIYA CEMENT
Some of the other cements companies. All cement companies are competitors.
Joint venture with Ital cement

The scenario of mergers and acquisitions is still vast in the cement industry. The entry of May multinationals. The other MNCs planning to enter the Indian market and consolidation of the companies in India has been forcing mergers in the cement industry. Now company is under joint venture having rated capacity of 17 lakhs per annum. Ital cements group CCBs mother company ( Companies des cements ), and the Zuari Industries Ltd (ZIL) of India have reached an agreement to create a 50:50 joint venture which will assume the cement activities of ZIL, consisting of the cement plant of yerraguntla, in Andhra Pradesh.
Location of the plant:

Cement and its raw materials namely coal and lime stone, are all bulky that make transportation difficult and uneconomical. Given this, cement plants are located close to both sources of raw materials and markets. Most of lime stone deposits in India are located in Madhya Pradesh, Rajasthan, Andhra Pradesh, Maharashtra and Gujarat. There is a tradeWorking Capital Management - 20 -
off between proximity to markets and proximity to raw materials due to which some cement plants have been setup near big markets despite lack of raw materials. Zuari cement industries ltd. is located at Krishna Nagar, in Yerraguntla, Kadapa district. It was nearest to the railway station and also nearest to the road. It was 6 km distance to yerraguntla. Location of the plant at this place is having the following advantages. Location in industrial belt of Rayalaseema with sophisticated facilities like water. Present of best suited limestone proved scientifically for cement. Low free limestone to ensure reduce surface cracks. Low heat of hydration from better soundness. Low magnesia content to ensure reduced tensile cracks. Specially designed setting time to suit Indian working conditions. Cement production during the period has also increased from about 72.23 million tons about 90 million tons in 2005-2006 excluding the contribution of mini cement plants.
PRODUCTION:
RAW MATERIALS:
The actual requirements of raw material at 100% capacity utilization would be; 1. 2. 3. 4. 12.5 million tons of limestone per annum. 70000 tons of Gypsum per annum. 39000 tons of Bauxite per annum. 20000 tons of Iron ore per annum. The limestone is major component required for the plant is net from the mines located adjacent to the proposed site. 1. 2. 3. Gypsum is procured from fertilizer factories at Madras and Cochin. Iron is soured partly from mini steel plants located at Tirupathi and partially from Bellary. Bauxite is procured from Goa, Karnataka and Maharashtra.
POWER:
Maximum estimated power demand is 45 M.V. The company has an existing contract 50 M.V demands APSEB, the plant presents has D.G sets with an aggregate general capacity of 12.6 M.V.
WATER:
Water is required for seeds of consumption make for plant and machinery for general need in plant. Company has a pumping station and underground bore wells near Hanuman Gutta village at Penna River to tap the undergrounds water in riverbed.
TRANSPORT:
The factory is when connected to different part of the country through rail and road facilities is near to Yerraguntla railway station and has a railway lint to the factory with an extern point within the factory premises 605 of the cement is dispatched by rail gal is received through rail. The plant is connected to the nearest state highway to Bangalore, Hyderabad and Chennai.
MANPOWER:
Existing plant has a total of 500 employees. After and addition of employees may be required
QUARRY:
It is situated adjacent to the factory. It constituted limestone, one of the major materials for cement industry. The quarry has a mining base area of 1027.56 acres.
S.no
Description
Massive (MT) grade limestone 108442 29530
Flagged stone(MT ) 9.894 2540
Total (MT)
1 2
Total reserves of limestone 36 blocks Un workable limestone due to mining obstacles Workable reserves
118.36 32.07
79912
7354
86.266
Chambal fertilizers and chemicals ltd (CFCL) promoted by Zuari industries ltd., has set up a large gas based area manufacturing plant at Gadapan about 35 km from Keta, a major industrial town of Rajasthan state in India. CFCLs plant is a state-of-the-are-high-tech complex built at a cost of Rs.12.67 billions. Spread over an area of 1105 acres (or 447 hectares 4.47 sq.kms), containing the manufacturing units offsite facilities including captive power plant, railways siding and amenities like residential complex, club, school, etc in a pleasant and green surroundings snamprogetti of Italy and Haldor topsoe of Denmark provided the technical know-how and Engineering and other services for Ammonia and urea plant while off-site facilities were built mainly by Tokyo engineering India ltd. The enterprise value of the unit has been pegged at Rs. 740 crores. The creation of this joint venture company is a new step in the international of the Ital cement group in Asia. It is a new opportunity for the group, to further increase its presence in the emerging countries by entering the promising Indian market, the third largest in the world. In combination with a very important partner says a release issued by laggard who advised ital cement on the deal. Here are 6 of the many reasons why Zuari 53 grade and 43 grades cement edges out its competitors. 1. 2. 3. 4. 5. 6. High compressive strengths. Low heat of hydration. Better soundness. Lesser consumption of cement for M-20 concrete grade and above. Faster de-shuttering of formed work. Reduced construction time. With a superior and wide range of cement cattering to very conceivable building need, Zuari cement is a formidable player in the cement market. Here are just a few reasons why Zuari cement is chosen by millions in India. Ideal raw materials Low time and magnesia content and high proportion of silicates Greater fineness Slow initial and fast final setting Wide range of applications
Quality customer service
A wide range to address every need:

Residential, commercial, multistoried buildings and complex. Mass concreting-dams, canals, spillways Construction and repair of pavements, roads, flyovers and runways. Spun pipes and poles manufacturing Cold weather concreting Pre-fabricated elements such a pipes, sleepers, windows, door frames etc. In an effort to reach out to customers better, Zuari cement as set up a technical cell named Zuari home partner. This cell gives guidance in the field of building. Technology, architecture, housing finance and economical usage of the high quality. Technical experts provide the assistance according to the individual requirements. So that customers get the best value for the investment they have made.
Quality customer service:
Products
Zuari Cement manufactures and distributes its own main product lines of cement .We aim to optimize production across all of our markets, providing a complete solution for customer's needs at the lowest possible cost, an approach we call strategic integration of activities. Cement is made from a mixture of 80 percent limestone and 20 percent clay. These are crushed and ground to provide the "raw meal, a pale, flour-like powder. Heated to around 1450 C (2642 F) in rotating kilns, the meal undergoes complex chemical changes and is transformed into clinker. Fine-grinding the clinker together with a small quantity of gypsum produces cement. Adding other constituents at this stage produces cements for specialized uses. Zuari Cements range of cement
Zuari Superfine Cement
Zuari 43 Grade Cement
Zuari Superfine P53 Cement
BOARD OF DIRECTORS
DIRECTORS : Saroj Kumar Poddar, Chairman Rodolfo Danielli Yves Rene Nanot Goran Siefert Maurizio Caneppele, Managing director Raghunathan Vishwanathan EXECUTIVES : Director-Marketing Director-Technical Vice President COMPANY SECRETARY BANKERS : : L.R Neelakanta State Bank of India, Andhra bank, BNP Paribas, Standard chartered Bank, State Bank of Hyderabad. AUDITORS FACTORY : : BSR & Co., Chartered accountants Bangalore Krishna Nagar, Yerraguntla, Kadapa Dist. Working Capital Management - 25 ; K. Srivasthava : P. Sheoran : S. Suresh
CARPORATE OFFICE
No.1, 10th Main hall III stage, Jeevanbima Nagar Bangalore.
BRANCHES:
ANDHRA PRADESH KARNATAKA TAMILANDU KERALA GOA ORISS
Organization structure:
The organization structure of cement is simple and flat. The employees are assigned grades based on their pay packages. These grades are not based on the job responsibilities of the employees. Employees having similar job responsibilities may have different grades for reasons like duration of association with the company.
ORGANIZTION CHART:
PRESIDENT
D.G.M COMMERCE
D.G.M PRODUCTION
V.P MARKETING
V.P FIFNFNCE
General marketing manager Senior marketing Manger Assistant marketing manger Sales officer Sales officer
Working Capital management Introduction

Working capital may be regarded as the lifeblood of a business. Its effective provisions can do much to ensure the success of business, which its inefficient management can lead not only to loss of projects but also the ultimate downfall of what otherwise, might be considered as promising concern. Thus, its management is considered as one of the most important aspects of firm's Financial Management. The term working capital stands for that part of the capital which is required for the financial working of the company in simple words, we can say that working capital is the investment needed for carrying out day to day operations of the business smoothly. Working capital refers to a firm's investment in short term assets, viz. Cash shortterm securities, Accounts receivable (debtors) and inventories of raw materials, work in progress and finished goods. It can be regarded as that portion of the firm's total capital, which is, employed in short-term operations. Funds thus invested in current assets keep revolving false and are being constantly concerted in to cash and this cash flow out again in exchange for other current assets. Hence, it is also known as revolving or circulating capital. Working Capital Management - 27 -
According to genestenberg,"circulating capital means current assets of a company that are changed in the ordinary course of business from one form to another, as for example from cash to inventories, inventories to receivables, receivables into cash". These are invariably a time lag between the sale of gods and the receipt of cash. There is there fore need for working capital in the form of current assets to deal with the problem arising out of lack of immediate realization of cash against goods sold. Therefore sufficient working capital is necessary to sustain sales activity.
CONCEPTS OF WORKING CAPITAL

1) Gross working capital. 2) Net working capital.
GROSS WORKING CAPITAL

The gross working capital refers to the firms' investment in the total current assets of the enterprise. The current assets are those assets with in the ordinary course of business can converted into cash with in the short period of normally one accounting year.
NET WORKING CAPITAL

The net working capital can be defined into two ways the most common definition of working capital is difference between current assets and current liabilities. Net working capital can also be defined as that portion of firm's current assets. Which are financed with long-term funds.
KINDS OF WORKING CAPITAL

1) Permanent or fixed working capital 2) Temporary or variable working capital
PERMANENT WORKING CAPITAL

Permanent working capital is the minimum amount or minimum level of current assets. This is continuously required by the enterprise to carry out its normal business operation. For e.g., every enterprise has to maintain a minimum level of raw materials. Working Capital Management - 28 -
Work-in-progress, finished goods and cash balance for paying Wages, salaries, rent etc. during the year. This minimum level of current assets is called permanent or fixed working capital as this part of capital is permanently blocked in current assets. Regular working capital is the amount of working capital needed for the continuous operations of the business of the company without any breakage.
TEMPORARY WORKING CAPITAL:

Temporary working capital is the amount of working capital, which is required to meet the seasonal and special needs of the business. 1) Seasonal working capital refers to that financial requirement that crop up during a particular season behind the regular working capital most businesses require at stated intervals large amount of current assets to fill the demands of the seasonal busy periods 2) Special working capital refers to that part of the working capital, which is required to meet special extengencies such as launching of extensive marketing campaigns or conducting research etc.
NEED FOR WORKING CAPITAL

The need for working capital to run the day to day activities cannot be over emphasized we will hardly find a business firm, which does not require any amount of working capital. Indeed, every firm differs in these requirements of the working capital. The main objective of financial decision making is to maximize shareholders wealth and to endeavor this firm should earn sufficient returns requires a successful sales activity. For a successful sales activity the firm has to invest sufficient funds in current assets. Current assets are needed because sales do not concert into cash instantaneously.
OPERATING CYCLE
Operating cycle is the time duration required to convert sales after the conversion of resources into inventories into cash. In other words, an operating cycles refers to length of time necessary to complete The following cycle of events. 1) Conversion of cash into raw materials. Working Capital Management - 29 -
2) Conversion of raw materials into work in progress. 3) Conversion of work-in-progress into finished goods. 4) Conversion of finished goods into accounts receivables. 5) Conversion of accounts receivables into cash
Accounts Payable
Value Addition
Raw Materials
WIP
Cash
THE WORKING CAPITAL CYCLE (OPERATING CYCLE)
Finished Goods
Accounts Receivable
SALES
Financing of working Capital

There are different types of financing polices in vague for financing working capital requirements. The requirements of working capital may be for fixed working capital and variable working capital requirements.The fixed proportion of working capital should be generally financed from the fixed capital sources while the variable working requirements of a concern may be met the short-term sources of capital. The various sources of financing of working capital are as follows Working Capital Management - 30 -
Sources of Working Capital
Long-term financing Finance Institutions Debentures Public Deposits Shares Working Capital Policies:
Short term Financing Short-term Credits Loan from Banks Commercial Papers Factoring
Spontaneous Financing Trade Creditors Outstanding Expenses
The financial manager should determine the optimum level of currents assets, so that the wealth of shareholders is maximized. A firm needs fixed current assets to support a particular level of output. However, to support the same level of output, the firm can have different levels of current assets to fixed assets. Dividing current assets by fixed assets give CA/ FA ratio.
Conservative Working Capital Policy:

If firms maintains higher investment on current assets to a constant investment on fixed assets, i.e. assuming a constant level of fixed assets, a higher CA/FA ratio indicates conservative current assets policy it implies greater liquidity and lower risks.
Aggressive Working Capital Policies:

If a business firm maintains the lower level of current assets to a constant fixed assets that is a lower CA/FA ratios means an aggressive current policy. Assuming other factors constant. It indicates higher risks and poor liquidity. Working Capital Management - 31 -
Average Working Capital Policies: If a business firms maintains moderated level of current assets to constant fixed assets. That is the current assets policy of the most of the firm may fall between in conservative and aggressive working capital policy, which is called average working capital policy. It indicates moderate liquidity and risks.
COMPOSITION OF WORKING CAPITAL

The individual composite items of working capital consist of current asset and current liabilities.
CURRNET ASSETS
Current assets are those, which can be converted into cash within one year without effecting the operations of the firm.
List of current assets:

Cash in hand & bank balance Bills receivables Sundry debtors Short term loans and advances Investments Government other trustee securities Fixed deposits with the banks Inventories of stock Raw materials Work in progress Stores and spares
CURRENT LIABILITIES
Current liabilities are those, which are intended to be paid in the ordinary course of business within a short period of normally one year out of the current assets or the income of the business.
LIST OF CURRNET LIABILITIES:

Bills payable Sundry creditors or accounts payable Short term borrowings Banks Others Unsecured loans Public deposits maturing one year Deposits from dealers, selling against. Dividends payable Bank overdraft Accrued or outstanding expenses Provision for taxation Sales tax and excise tax.
THEME OF WORKING CAPITAL

Working capital management is considered as one of the most important aspects of firms financial management. The goal of working capital management is to manage the firms current assets and current liabilities in such a way that the satisfactory level of working capital is maintained. Each of the current assets should be managed efficiently in order to maintain the liquidity the firm while not keeping too high a level of any one of them. The success of business concerns among other things depends upon the manner in which its working Capital is managed. The interaction between the current assets and current liabilities is there fore the main theme of the theory of working capital. It is a task of financial manager to maintain an appropriate level of working capital i.e. enough current assets to pay off current liabilities, either excess nor less because in either cases the result could be the failure of the business. Excessive working capital impairs firms profitability, as ideal investment earns nothing. On the other hand, inadequate amount of working capital can threaten the solvency of the firm because of its inability to meet its current obligations. Working Capital Management - 33 -
Optimum Working Capital Position:

The firm should maintain a sound working capital position. It should have adequate working capital to run its business operations. Both excessive as well as inadequate working capital positions are dangerous from the firms point of view. Excessive working capital means idle funds, which earn no profits for the firm. Paucity of working capital not only impairs the firms profitability but also results in production interruption and inefficiencies.
SCOPE OF THE STUDY:

The basis scope of the study is to understand & determine working Capital management adopted by the department. The study also includes an observation of different years working capital of ZUARI CEMENT & its financial position.
NEED FOR THE STUDY:

Working capital is referred to be the lifeblood and nerve center of a business the need for working capital is to run day to day activities cant be over emphasized. Firms aim at maximizing the wealth and should earn sufficient return from its operations. The working capital is having the great influence on the development and progress of any organization. The efficient management of working capital is as essential to maintain the smooth functioning of day to day operations .Hence there is a need to study the importance of working capital management in ZUARI CEMENT
SIGNIFICANCE OF THE STUDY:

The working capital reflects the financial position and operation strengths and weakness of the concern. These statements are useful to management investors, creditors, bankers, Government and public at large. It served as a basis to decide the wise dividend declaration by company.
Objective Of The Study

To study the liquidity position of the company. To calculate and compare the operating cycle duration of the company over the study period. To analyze the inventory turnover performance of the company over the study period. To analyze the management of working capital that required for smooth running of the firm.
METHODOLOGY OF THE STUDY:

The data that was obtained for the study can be classified into the following types. PRIMARY DATA SECONDARY DATA Primary data comprises of information obtained during discussions with the officers and staff in the finance department. Secondary data comprises of information obtained from ratio analysis and ratio analysis estimates of other financial statements files and some other important documents maintained by the organization are also the helpful. The administration report published by ZUVARI CEMENT is another source of data.
LIMITATIONS OF THE STUDY:

Time is one of the limiting factor of the study the duration of training was two months which was too short period to study the whole organization. Second limiting factor is the busy schedule of the executives. As a result of this it is very difficult to get minute information about the organization. Some aspects of financial information were not available because of the confidentiality of ZUVARI CEMENT.
Working Capital Analysis

1 .STATEMENT OF CHANGES IN WORKING CAPITAL (2004-05) Particulars 2004 2005 Increase (+) A) Current Assets Inventories Sundry Debtors Cash and Bank Loan and advances 2281.92 3109.72 1716.40 1771.46 2503.20 2467.39 1290.71 1906.20 8167.50 134.74 221.28 642.33 425.69 Decrease (-)
Total of Current Assets (A) 8879.50 B) Current Liabilities Current Liabilities Provisions 3827.41 50.43
3381.69 127.90 3509.59 4657.91 343.76
445.72 77.47
Total of Current Liabilities3877.84 (B) Working Capital (A-B) Net decrease in Working Capital TOTAL 5001.09 5001.09
343.76 1145.49 1145.49
5001.09
2. STATEMENT OF CHANGES IN WORKING CAPITAL(2005-06) Particulars 2005 2006 Increase (+) Working Capital Management - 36 Decrease (-)
A) Current Assets Inventories Sundry Debtors Cash and Bank Loan and advances Total of Current Assets (A) B) Current Liabilities Current Liabilities Provisions 3381.69 127.90 3758.62 289.62 3922.48 6803.46 2145.55 6803.46 4216.8 4216.8 376.93 161.72 2503.20 2467.39 1290.71 1906.20 8167.50 3114.57 934.79 1383.35 5284.23 10725.94 92.64 3378.03 611.37 1532.6
Total of Current Liabilities (B) 3509.59 Working Capital (A-B) 4657.91
increasing in Working Capital 2145.55 TOTAL 6803.46
3 .STATEMENT OF CHANGES IN WORKING CAPITAL (2006-07) Particulars 2006 2007 Increase (+) A) Current Assets Inventories 2889.51 3971.09 1081.58 Decrease (-)
Sundry Debtors Cash and Bank Loan and advances
1866.11 1576.48 3442.81
2531.00 12012.16 8821.93 27336.93
664.89 10435.68 5379.12
Total of Current Assets9774.91 (A) B) Current Liabilities Current Liabilities Provisions Total of 6020.09 566.86 Current6586.95
131132.52 1373.63 14506.18 12830.78
125112.43 806.77
Liabilities (B) Working Capital (A-B) 3187.96 Net increase in9642.82 12830.78
9642.82 12830.78 17561.27 17561.27
Working Capital TOTAL
4 .STATEMENT OF CHANGES IN WORKING CAPITAL (2007-08) Particulars 2007 2008 Increase (+) A) Current Assets Inventories Sundry Debtors Cash and Bank 3971.01 2531.00 12012.16 6071.35 2640.09 4773.47 2100.34 109.09 7238.69 Decrease (-)
Loan and advances
8821.93
10803.09 24288.00
1981.16
Total of Current Assets27336.1 (A) B) Current Liabilities Current Liabilities Provisions Total of 131132.52 1373.63 Current14506.18
22479.86 2734.18 25214.04 -926.04 13755.96
108625.66 1360.55
Liabilities (B) Working Capital (A-B) 12829.92 decreasing in Working Capital TOTAL 12829.92
13755.96 112816.25 112816.04
12926.04
5. STATEMENT OF CHANGES IN WORKING CAPITAL (2008-09) Particulars 2008 2009 Increase (+) A) Current Assets Inventories Sundry Debtors Cash and Bank Loan and advances 6071.35 2640.09 4773.47 10803.09 4378.43 3922.79 21081.89 7482.89 36866.00 ` 1282.7 18441.8 3320.2 1692.92 Decrease (-)
Total of Current Assets24288.00 (A) Working Capital Management
- 39 -
B) Current Liabilities Current Liabilities Provisions Total of 22479.86 2734.18 Current25214.04 19445.18 4921.17 24366.35 12499.65 13425.69 12499.65 20625.80 20625.80 3034.68 2186.99
Liabilities (B) Working Capital (A-B) -926.04 Net increase in13425.69 12499.65
Working Capital TOTAL
DATA ANALYSIS AND INTERPRETATION LIQUIDITY RATIOS: 1. CURRENT RATIO:

Current ratio is calculated by dividing the current assets by current Liabilities. Current assets include cash and those assets that can be converted into cash Within a year, such as marketable securities, debtors and inventories prepaid expenses Also includes in current assets current liabilities include creditors, bills payable, arrived Expenses, short term bank loan, income tax liability and long term debt maturing in the Current year.
Current ratio represents a margin of safety for creditors. Current ratio of 2 to 1 or more is considered satisfactory. The higher the current ratio the greater the margin of safety. The larger the amount of current assets in ratio to current liabilities the more the firms ability to meet its current obligations.
Data:
YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 CURRENT ASSETS 8167.50 10725.94 27336.1 24288.00 36866.00 CURRENT LIABILITES 3509.59 3922.48 14506.18 25214.04 24366.35 Table-1 CURURRENT RATIO (Rs in lakhs) 2.32 2.73 1.88 0.96 1.51
FACTORS YEAR CURRENT RATIO 2004-2005 2.32 2005-2006 2.73 2006-2007 1.88 2007-2008 0.96 2008-2009 1.51
CURURRENT RATIO
3 2.5 percentage 2 1.5 1 0.5 0 1 2 3 years 4 5
Graph No-1 Interpretation: Working Capital Management - 41 -
From the year 2005-2009 the zuari cement industry current ratio is 2.327, 2.734 ,1.884,0.963,1.512.From the first year of the current ratio is satisfactory above three year the current ratio is less than 2:1 it indicate that the firm doesnt have liquidity position .
QUICK RATIO (or) ACID TEST RATIO:

Quick Ratio establishes a relationship between quick or liquid, Assets and liabilities. An asset a Liquid if it can be converted into cash immediately. Inventories are considered to be less liquid. The quick ratio is found out by dividing Quick assets by current liabilities. A quick ratio of 1 to 1 is considered to represent A satisfactory current financial condition. Quick Ratio =(Current assets-Inventories)/Current liabilities
Data: YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 QUICK ASSETS 4657.91 7611.37 23365.09 18216.65 32487.57 Table-2 FACTORS YEAR QUICK RATIO 2004-2005 1.61 2005-2006 1.94 2006-2007 1.61 2007-2008 0.72 2008-2009 1.33 CURRENT LIABILITES 3509.59 3922.48 14506.18 25214.04 24366.35 QUICK RATIO (Rs in lakhs) 1.61 1.94 1.61 0.72 1.33
QUICK RATIO
2.5 2 percentage 1.5 1 0.5
Working Capital Management 0

2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
- 42 -
Graph No-2 Interpretation: During the year 2005-09 the quick ratio of the zuari cements is 1.63, 1.94, 1.61,0.72, 1.33.from the first 3 year and last year was satisfied but 2008 year was not satisfy.
CASH RATIO:
Cash is the most liquid asset. A financial analyst may examine cash ratio and Its Equivalent to current liabilities. Trade investment or marketable securities are Equivalent of cash. The standard ratio is 0.5:1 or 50:100(%). CASH RATIO= (Cash+ Marketable Securities)/Current Liabilities Data: YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 FACTORS YEAR QUICK RATIO 2004-2005 0.36 2005-2006 0.35 2006-2007 0.82 2007-2008 0.18 2008-2009 0.86 Cash 1290.71 1383.35 12012.16 4793.47 21081.81 Table-3 CURRENT LIABILITES 3509.59 3922.48 14506.18 25214.04 24366.35 Cash RATIO (Rs in lakhs) 0.36 0.35 0.82 0.18 0.86
Cash RATIO
1 0.8 percentage 0.6 0.4 0.2 0 2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
Graph No-3 Interpretation: During the period 2005-09 the cash ratio position of zuari cement was 0.36, 0.35, 0.82, 0.18, 0.86.the standard cash ratio is 0.5:1. regarding in the year 2007 -0.8,2009-0.9 and the reaming year 2005-0.36,2006-0.35 and 2008 0.2 .it explain that 2007 and 2008 the firm is the having the liquidity position and during year 2005 ,2006 and 2008 the firm doesnt have the minimum standard ratio of liquidity position .
NET WORKING CAPITAL RATIO:

The difference between current assets and current liabilities excluding short term Bank barrowing is called net working capital or net current assets. Net working capital Ratio is some times used as measure of a firms liquidity. It is considered that between Two firms. The one having the larger networking capital has the greater ability to meet its current obligations. Net working capital ratio = current assts-current liabilities Data: YEAR Current assets Net working capital ratio - 44 -
Working Capital Management
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
Current liabilities 8167.50 3509.59 10725.94 3922.48 27336.1 14506.18 24288.00 25214.04 36866.00 24366.35 Table No-4
(Rs in lakhs) 4657.91 6803.46 12829.92 -926.04 12499.65
FACTORS YEAR Net working Capital Ratio 2004-2005 4657.91 2005-2006 6803.46 2006-2007 12829.92 2007-2008 -926.04 2008-2009 12499.65
Net working capital ratio

14000 12000 10000 percentage 8000 6000 4000 2000 0 -2000 2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
Graph No-4 Interpretation: From the year 2005-4657.09,2006-6803.46,2007- 12829.92, 2008 926.04,and 2009- 12499.65. it indicates that from the year 2005-2007 The net working capital is increased, in the year 2008 the firm doesnt have the net working capital and in the year 2009 the firm they recollects the net working capital.
II. LEVERAGE RATIOS:

Financial leverage refers to the use of debt finance leverage ratios help in Assessing the risk arising from the use of debt capital. To judge the long-term Financial position of the firm, financial leverage ratios are calculated the ratios Indicate Mix of funds provided by owners and lenders.
1.
DEBT EQUITY RATIO:

Debt equity ratio tells the relation ship between total debt and capital owned. It is
Ratio of amount invested by outsiders to the amount invested by the shareholders. This ratio reflects the relative claims of share holders and creditors against the assets of the company. A high ratio shows the creditors have invested more in the business Than shareholders greater the debt shows the creditors have invested more in the Business than shareholders grater the debt equity ratio, the greater the risk to the Creditors. In Indian financial institutions usually permit debt equity of 2:1 i.e. is Rs.200 by way of long-term loans for every Rs.100 promoters Equity. Debt equity ratio = Total debt / Net worth Net worth = Capital + reserves
Data: Debt equity ratio YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Total debt Net worth 27198.44 64698.00 25196.68 64698.07 5659.63 80846.56 5141.16 100619.28 4360.00 117583.23 Table No-5 (Rs in lakhs) 0.42 0.38 0.07 0.05 0.03
FACTORS YEAR 2004-2005 DEBT EQUITY 0.42 RATIO
2005-2006 0.38
2006-2007 0.07
2007-2008 0.05
2008-2009 0.03
DEBT EQUITY RATIO

0.5 0.4 percentage 0.3 0.2 0.1 0 2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
Graph No-5 Interpretation: Higher the debt equity ratio indicates in flexibility of operation. During the year 2005-2009 the debt equity ratio is 0.42, 0.38 0.07, 0.05, and0.03. the debt equity ratio of zuari cements is decreases from the year 2005-2009 it implies that the firm in the position of flexible operation.
TOTAL DEBT RATIO:

Debt ratios are used to analyze the long term solvency of a firm. Total debt Indicates the short and long term borrowings. The firm may be interested in knowing the Proportion of the interest bearing debt in the capital structure. It may therefore compute the debt ratio by following formula. Total Debt Ratio=Total debt/capital employed Working Capital Management - 47 -
Total debt= Secured loans + UN secured loans. Capital employed = total debt + Net worth
Data: YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Total debt 27198.44 25196.68 5659.63 5141.16 4360.00 Table No-6 FACTORS YEAR TOTAL DEBT RATIO 2004-2005 0.29 2005-2006 0.28 2006-2007 0.21 2007-2008 0.12 2008-2009 0.02 Capital employed 91896.51 89896.69 102960.85 130708.68 181385.48 Total Debt ratio (Rs in lakhs) 0.29 0.28 0.21 0.12 0.02
TOTAL DEBT RATIO

0.35 0.3 percentage 0.25 0.2 0.15 0.1 0.05 0 2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
Graph No-6 Interpretation: During the year 2005-2009 the debt ratio of 0.70, 0.72, 0.78, 0.88, and 0.97 increased. The firm having the higher debt ratio for 2005-2009. Working Capital Management - 48 -
TOTAL LAIBILITY RATIO

While contribution the leverage ratios to the current liabilities are excluded even through it is one of the important elements in the balance sheet and it creates short term liability to the firm. One may like to introduce these current liabilities for computation leverage rations on the ground that they are important determinates of the firms financial risk. They represent obligation and exert pressure on the firm and restrict its activities. This ratios is calculated by dividing the total liabilities by total assets. Total liability ratio = total liabilities / total assets YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Total liabilities 3509.59 3922.48 14506.18 25214.04 24366.35 Table No-7 FACTORS YEAR TOTAL DEBT RATIO 2004-2005 0.035 2005-2006 0.038 2006-2007 0.126 2007-2008 0.210 2008-2009 0.179 Total Assets 98086.04 101588.4 114240.92 120001.83 135594.3 Total liability (Rs in lakhs) 0.035 0.038 0.126 0.210 0.179
Total liability ratio 0.25 0.2 percentage 0.15 0.1 0.05 0 2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
Graph No-7 Interpretation: In the zuari cements from the 2005-2009 the liability ratio is increases it indicates that insufficient utilization of asset value
CAPITAL EMPLOYED TO NETWORTH RATIO:

It is also called equity ratio. It indicated the proportion of total assets financial by owners. This ratio establishers the relation ship between capital employed net worth of the firm. The ratio of capital employed is an important ratio for determining long term solvency. This ratio is also called proprietary to total equity or net worth to total assets ratio. EQUITY RATIO = CAPITAL EMPLOYED / NETWORTH. CAPITAL EMPLOYED = TOTAL DEBT + NETWORTH
Data: YEAR Capital NETWORTH CAPITAL EMPLOYED - 50 Working Capital Management
employed 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 91896.51 64698.00 89896.69 64698.07 102960.85 80846.56 130708.68 100619.28 181385.48 117583.23 Table No-8
TO NETWOTH RATIO (Rs in lakhs) 0.593 0.594 0.898 0.557 0.538
FACTORS YEAR Capital employed to net worth ratio
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
0.593
0.594
0.898
0.557
0.538
CAPITAL EMPLOYED TO NETWORTH RATIO

1 0.8 percentage 0.6 0.4 0.2 0 2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
Graph No-8 Interpretation: During the year from 2005-2007 the capital employed to net worth ratio is 0.593, 0.594, 0.898,and apart two years of 2008-0.557and 2009-0.5386 capital employed to net worth ratio is decreases.
III. ACTIVITY RATIOS:

Activity ratios are employed to evaluate the efficiency with which the firm managers and utilizes its assets. These ratios are also called Turnover Ratios. Because they indicated the speed with assets are being converted into sales.
INVENTORY TURNOVER RATIO (or) STOCK TURNOVER RATIO :

Inventory turnover ratio is a measure of liquidity. It indicates the speed at which the inventory is sold out. A high turnover ratio indicates that the inventory is out Fast and a low turnover ratio show a sale of inventory. This ratio indicates the Efficiency of the firm in selling its products. Stock turnover ratio=Cost of goods sold / average inventory Data: YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Capital goods sold 27861.02 16825.32 36172.58 46374.89 40612.42 Table No-9 Average Inventory 2392.56 2808.88 3430.26 5021.18 5224.89 Inventory turnover ratio (Rs in lakhs) 11.64 5.99 10.54 9.23 7.77
FACTORS YEAR Inventory turnover 14 ratio

12 percentage 10 8 6 4 2
2004-2005 11.64
2005-2006 5.99
2006-2007 10.54
2007-2008 9.23
2008-2009 7.77
Inventory turn over Ratio

2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
- 52 -
Graph No-9
Interpretation: The inventory turn over ratio shows how rapidly the inventory is turning into receivable through sales a high inventory turn overt is indicative of good inventory management. In zuari cement from the fast two years the inventory management is not well in position the remaining three years 2007-34013, 2008-39097, 2009-46.3 increases. In the three years zuari cement inventory management is well in position.
WORKING CAPITAL TURNOVER RATIO:

Working capital turnover ratio shows the efficiency of business operations is also judged by the capital invested to sales. Working capital turnover ratio indicates the utilization of Working capital and the number of times that the working capital turnover during the year the better is the utilization of resources of working capital. Working capital turnover ratio=sales / working capital Working Capital Management - 53 -
Data: YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Sales 39889.97 47306.18 116900.24 137728.95 120946.74 Table No-10 FACTORS YEAR Working capital ratio 2004-2005 8.56 2005-2006 6.95 2006-2007 9.11 2007-2008 14.87 2008-2009 9..71 Net working capital 4657.91 6803.46 12829.92 -926.04 12449.65 Working capital ratio (Rs in lakhs) 8.56 6.95 9.11 14.87 9..71
WORKING CAPITAL TURNOVER RATIO

16 14 12 10 8 6 4 2 0 1 2 3 years 4 5
percentage
The Among the year 2005-09 the working capital turn over ratio of the firm is fluctuate from the first year it may acquire better position and the next year it was decrease and in the year 2008 it will go to losses and then it will recollect its position in the year 2009
FIXED ASSETS TURNOVER RATIO:

The firm may wish to know its efficiency of utilizing fixed assets and Current assets separately. Fixed assets turnover=sales / Net fixed assets Current assets turnover ratio=sales / current assets Data: YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Sales 39889.97 47306.18 116900.24 137728.95 120946.74 Table No-11 FACTORS YEAR Fixed assets turnover ratio 2004-2005 1.18 2005-2006 1.49 2006-2007 1.95 2007-2008 2.49 2008-2009 2.37 Fixed assets 33762.33 31668.8 59832.78 55186.77 50.831.08 Fixed assets turnover ratio (Rs in lakhs) 1.18 1.49 1.95 2.49 2.37
Fixed Asset Turnover Ratio

3 2.5 percentage 2 1.5 1 0.5 0 2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
- 55 -
Graph No-11 Interpretation: Among the year 2005-2009 the fixed asset turn over ratio of the firm is increased from the first four years and then the nest year 2009 it may decreases. From these the previous year the firm may not satisfied.
TOTAL ASSETS TURNOVER RATIO:

The total assets turnover ratio shows the firms ability in generation sales from All financial resources committed to total assets. Total assets include net fixed Assets and current assets. TOTAL ASSETS TURNOVER RATIO=SALES / TOTAL ASSETS. Data: Total Assets Turnover YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Sales Total assets 39889.97 61777.57 47306.18 64931.9 116900.24 117019.81 137728.95 115827.87 120946.74 131329.86 Table No-12 ratio (Rs in lakhs) 0.6463 0.7285 0.9989 1.1890 10.058
FACTORS YEAR 2004-2005 Fixed assets 12

10 turnover ratio percentage 8 6 4 2
Total assets turnover
2005-2006 0.7285
2006-2007 0.9989
2007-2008 1.1890
2008-2009 10.058
0.6463
0 Working Capital Management 2004-2005
2005-2006
2006-2007 years
2007-2008
2008-2009
- 56 -
Graph No-12
Interpretation: During the year 2005-20009 the total asset turn over ratio of the firm is increased rapidly then the firm got better position in the year 2009-10.0582 then the previous four years. Finally the total asset turn over ratio of the firm is satisfactory level.
DEBTORS TURNOVER RATIO:

The ratio is a test of liquidity of firm and it measures how fast the debtors are converted into cash in year. The higher the turnover ratio and lower the collection period. The better is the liquidity of the firm. DEBTORS TURNOVER RATIO = CREDIT SALES / DEBTORS Data: YEAR 2004-2005 Sales 39889.97 Debtors 2467.39 Debtors Turnover ratio (Rs in lakhs) 16.16 - 57 -
2005-2006 2006-2007 2007-2008 2008-2009
47306.18 116900.24 137728.95 120946.74 Table No-13
934.79 2531.00 2640.09 3922.79
50.60 46.18 52.16 30.83
FACTORS YEAR Debtors turnover ratio 2004-2005 16.16 2005-2006 50.60 2006-2007 46.18 2007-2008 52.16 2008-2009 30.83
DEBTORS TURNOVER RATIO

60 50 percentage 40 30 20 10 0 2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
Graph No-13 Interpretation: During the year 2005-2009 the debtors turn over ratio is fluctuated in the year 2005 it was not satisfied and 2006 it may got high turn over with the 50.606 and again it was decrease in the year 2008. it was un high turn over with 52.168 and again its may leads to unsatisfactory level.
CAPITAL EMPLOYED OR NET ASSET TURN OVER RATIO :

A firm ability to generate a large volume of sles for a given amount of net assets is most important aspect of the operating performance. The unutilized of underutilized assets increase the firms need for costly financing as well as expenses for maintenance and upkeep. This net assets turnover ratio should be interpreted cautiously. The net assets turnover ratio can be calculated as sales divided by net assets where net assets includes net fixed assets, net current assets. Capita employed turnover or net assets turnover=sales/net assets
Data: Net assets turnover YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Sales 39889.97 47306.18 116900.24 137728.95 120946.74 Table No-14 Net assets 41420.24 38472.3 72662.73 72662.73 63330.73 ratio (Rs in lakhs) 0.96 1.22 1.60 1.89 19.09
FACTORS YEAR Net assets turnover ratio 2004-2005 0.96 2005-2006 1.22 2006-2007 1.60 2007-2008 1.89 2008-2009 19.09
Net assets turnover ratio

25 20 percentage 15 10 5

2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
- 59 -
Graph No-14
Interpretation: Higher the operating profit ratio performance in zuari cement is increased rapidly from the year 2005-09 with 99.3018,99.6440,99.6906,99.6633,99.6643 fjrom these the firm may satisfied with these operating profit ratio.
CURRENT ASSETS TURNOVER RATIO:

Current assets turnover ratio is measured to know the firms efficiency of utilizing of investments in current assets. The current assets turnover ratio can be calculated as sales divided by current assets include inventory, debtors, cash & bank balance, other current assets, loans and advances. Generally a high current assets turnover ratio indicates efficient utilization of current assets in generating sales and if the ratio is low then it can be said inefficient utilization of current assets. Current assets turnover ratio=sales/current assets Current assets YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Sales Current assets turnover ratio (Rs in lakhs) 4.883 4.410 4.276 5.670 3.280
39889.97 8167.50 47306.18 10725.94 116900.24 27336.1 137728.95 24288.00 120946.74 36866.00 Table No-15 Working Capital Management
- 60 -
FACTORS YEAR 2004-2005 Current assets turnover ratio 4.883 2005-2006 4.410 2006-2007 4.276 2007-2008 5.670 2008-2009 3.280
Graph No-15 Interpretation: From the year 2005-09 the current asset turn over ratio from the 3 years 2005-07 is decreased and it again recover in 2008. it increases with 5.6706 and again decreases in 2009-3.280.
PROFITABILITY RATIOS:
Profitability ratios are calculated to measure the operating efficiency of the company. Besides management of the company, creditors and owners are also interested in the profitability of Firm. Creditors want to get interest and Repayment of principal regularly. Working Capital Management - 61 -
Owners want to get a required rate of return on their investment. This is possible only when the company earns enough Profits. Generally two major types of profitability ratios. They are calculated Profitability in relation to sales. Profitability in relation to investment.
GROSS PROFIT RATIO:

The gross profit ratio indicates the extent to which sales of goods per unit may Decline with out May loss in the operations of the firm. This is also known as Gross profit Margin (or) Gross profit margin on sales. The gross profit is the difference between sales and Cost of goods sold. GROSS PROFIT RATION=GROSS PROFIT / SALES *100 Data: YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 GROSS PROFIT 21028.95 31080.16 80727.66 91354.06 80333.32 Table No .16 SALES 39889.97 47306.18 116900.24 137728.95 120946.74 Gross profit ratio (Rs in lakhs) 30.15 64.87 69.05 63.01 66.42
FACTORS YEAR 2004-2005 Gross profit ratio 30.15
2005-2006 64.87
2006-2007 69.05
2007-2008 63.01
2008-2009 66.42
Gross profit ratio

80 70 60 50 40 30 20 10 0 2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
percentage
Graph No-16 Interpretation: From the year 2005-2009 the firm may fluctuated position in the beginning year the satisfactory level of the firm is low and then it will recollect its position from the next four years it may got the better position the firm is satisfied.
NET PROFIT RATIO:

Net profit is obtained when operating expenses, Interest and taxes are Subtracted from the gross profit. The net profit margin ratio is measured by Dividing profit after tax by sales. The ratio also indicates the firms capacity To withstand adverse economic conditions. NET PROFIT MARGIN=PROFIT AFTER TAX / SALES*100
Data: YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 FACTORS: YEAR profit after tax 2004-2005 5.27 2005-2006 4.78 2006-2007 15.44 2007-2008 14.35 2008-2009 14.02 profit after tax Sales Net profit Ratio (Rs in lakhs) 5.27 4.78 15.44 14.35 14.02
2104.92 39889.97 2265.11 47306.18 18057.74 116900.24 19772.72 137728.95 16963.95 120946.74 Table No-17
NET PROFIT MARGIN

20 percentage 15 10 5 0 2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
Graph No-17
Interpretation:
During the year 2005-2009the net profit ratio of zuari cements is fluctuated in the year 2005 the capacity of the net profit ratio 5.2768 and then it decreases in 2006. in the year 2007 the firm got highest net profit ratio then the previous two years and again the nest two years2008 and 2009 it may some what decrease..
OPERATING EXPENSES RATIO:

Operating expenses ratio is very important for analyzing the profitability if the firm. It should be compared over a period of time with industry average as well as firms or Similar type. The operating expenses ratio explains the change in the profit margin ratio. The Ratio is computed by dividing operating expenses by sales. OPERATING EXPENSES RATIO=OPERATING EXPENSES / SALES: Data: YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Operating expenses 27861.02 39889.97 16825.32 47306.18 36172.58 116900.24 46374.89 137728.95 40613.42 120946.74 Table No-18 Sales Operating expenses Ratio (Rs in lakhs) 0.698 0.355 0.309 3.336 0.335
FACTORS: Net YEAR 2004-2005 profit 0.698 2005-2006 0.355 2006-2007 0.309 2007-2008 3.336 2008-2009 0.335
Ratio Working Capital Management - 65 -
OPERATING EXPENSES RATIO

4 3.5 3 2.5 2 1.5 1 0.5 0 2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
percentage
Graph No-18 Interpretation: Higher the operating expense ratio indicates in inefficient performance firm operation if operating excess increases the from losses their working capital in the zuari in the year 2005.the operating expenses ratio is 0.6982 and the remaining years i.e 2006-2009. the operating expenses ratio is decreases it indicates that the firm performance is well in their operations .
OPERATING PROFIT RATIO:

The operating profit can be calculated by dividing operating profit by net sales. The operating profit includes net profit=non operating expenses (interest to be paid, income tax, loss on of asset) or gross profit minus operating expenses (administrative and selling expenses). Return on capital employed=100- operating expenses ratio Data: expenses ratio 2004-2005 0.698 2005-2006 0.355 2006-2007 0.309 Working Capital Management YEAR operating Operating profit Ratio (Rs in lakhs) 99.301 99.644 99.690 - 66 -
2007-2008 2008-2009
3.336 0.335 Table No-19
99.663 99.664
FACTORS: YEAR Operating profit Ratio 2004-2005 99.301 2005-2006 99.644 2006-2007 99.690 2007-2008 99.663 2008-2009 99.664
OPERATING PROFIT RATIO

99.8 99.7 percentage 99.6 99.5 99.4 99.3 99.2 99.1 2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
Graph No-19 Interpretation: Higher the operating prfit ratio performance in zuari cement is increased rapidly from the year 2005-09 with 99.3018, 99.6440,99.6906, 996633,99.6643 from these the firm may satisfied with these operating profit ratio.
RETURN ON SHAREHOLDER EQUITY RATIO:

Ordinary share holders are entitled to the residual profit a return on share Holders equity is calculated to see the profitability of owners investment. Return on equity Working Capital Management - 67 -
in cash how the firm is has used the resources of owners. The earning of a satisfactory return is the most desirable objective business. RETURN OF SHAREHOLDER EQUITY RATIO = PROFIT AFTER TAX / SHARE HOLDER EQUITY * 100 Data: YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 FACTORS: YEAR ROE Ratio 2004-2005 4.91 2005-2006 5.29 2006-2007 42.10 2007-2008 46.20 2008-2009 39.63 profit after share holders equity 42796.14 42796.14 42796.14 42796.14 42796.14 ROE Ratio (Rs in lakhs) 4.91 5.29 42.10 46.20 39.63 tax 2104.92 2265.11 18057.74 19772.72 16963.95 Table No-20
RETURN OF SHAREHOLDER EQUITY RATIO

50 40 percentage 30 20 10 0 2004-2005 2005-2006 2006-2007 years 2007-2008 2008-2009
Wealth maximization is the one of the most important objective in the financial management in zuari cement a share holders equity is 2005-0.049,2006-0.052,20070.21,2008-0.462 increase and in the year 2009-0.396 the share holder equity will decreases.
EARNING PER SHARE;

Earning per share is a small variation of return on equity capital and is calculated by dividing the net profit after tax and preference divided by the total number of equity shares. Earning per share= net profit (after tax ) / no. of equity share Data: YEAR 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 FACTORS: YEAR Earning per share Ratio 0.049 0.052 0.42 0.46 0.46 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 Net profit 2104.92 2265.11 18057.74 19772.72 16963.95 Table No-21 No. of equity share 42796.14 42796.14 42796.14 42796.14 42796.14 Earning per share Ratio (Rs in lakhs) 0.049 0.052 0.42 0.46 0.396
EARNING PER SHARE

0.5 0.4 percentage 0.3 0.2 0.1 0 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 years
Graph No-21
- 69 -
Interpretation: Higher the earning per share value is indicate well performance of firm operation from the year 2005-2009 the zuari cement earning per shares value is fluctuated.
FINDINGS
Note: 22. From the year 2005-2009 the zuari cement industry current ratio is 2.327, 2.734 , 1.884,0.963,1.512.From the first year of the current ratio is satisfactory above three year the current ratio is less than 2:1 it indicate that the firm doesnt have liquidity position . 23. During the year 2005-09 the quick ratio of the zuari cements is 1.63, 1.94, 1.61,0.72, 1.33.from the first 3 year and last year was satisfied but 2008 year was not satisfy. 24. During the period 2005-09 the cash ratio position of zuari cement was 0.36, 0.35, 0.82, 0.18, 0.86.the standard cash ratio is 0.5:1. regarding in the year 2007 -0.8,20090.9 and the reaming year 2005-0.36,2006-0.35 and 2008 0.2 .it explain that 2007 and 2008 the firm is the having the liquidity position and during year 2005 ,2006 and 2008 the firm doesnt have the minimum standard ratio of liquidity position . 25. From the year 2005-4657.09,2006-6803.46,2007- 12829.92, 2008926.04,and 200912499.65. it indicates that from the year 2005-2007 The net working capital is
increased, in the year 2008 the firm doesnt have the net working capital and in the year 2009 the firm they recollects the net working capital. 26. Higher the debt equity ratio indicates in flexibility of operation. During the year 2005-2009 the debt equity ratio is 0.42, 0.38 0.07, 0.05, and0.03. the debt equity ratio of zuari cements is decreases from the year 2005-2009 it implies that the firm in the position of flexible operation. 27. During the year 2005-2009 the debt ratio of 0.70, 0.72, 0.78, 0.88, and 0.97 increased. The firm having the higher debt ratio for 2005-2009. 28. In the zuari cements from the 2005-2009 the liability ratio is increases it indicates tha insufficient utilization of asset value 29. During the year from 2005-2007 the capital employed to net worth ratio is 0.593, 0.594, 0.898,and apart two years of 2008-0.557and 2009-0.5386 capital employed to net worth ratio is decreases. 30. The inventory turn over ratio shows how rapidly the inventory is turning into receivable through sales a high inventory turn overt is indicative of good inventory management. In zuari cement from the fast two years the inventory management is not well in position the remaining three years 2007-34013, 2008-39097, 2009-46.3 increases. In the three years zuari cement inventory management is well in position. 31. The Among the year 2005-09 the working capital turn over ratio of the firm is fluctuate from the first year it may acquire better position and the next year it was decrease and in the year 2008 it will go to losses and then it will recollect its position in the year 2009 32. Among the year 2005-2009 the fixed asset turn over ratio of the firm is increased from the first four years and then the nest year 2009 it may decreases. From these the previous year the firm may not satisfied. 33. During the year 2005-20009 the total asset turn over ratio of the firm is increased rapidly then the firm got better position in the year 2009-10.0582 then the previous four years. Finally the total asset turn over ratio of the firm is satisfactory level. 34. During the year 2005-2009 the debtors turn over ratio is fluctuated in the year 2005 it was not satisfied and 2006 it may got high turn over with the 50.606 and again it was Working Capital Management - 71 -
decrease in the year 2008. it was un high turn over with 52.168 and again its may leads to unsatisfactory level. 35. Higher the operating profit ratio performance in zuari cement is increased rapidly from the year 2005-09 with 99.3018,99.6440,99.6906,99.6633,99.6643 fjrom these the firm may satisfied with these operating profit ratio. 36. From the year 2005-09 the current asset turn over ratio from the 3 years 2005-07 is decreased and it again recover in 2008. it increases with 5.6706 and again decreases in 2009-3.280. 37. From the year 2005-2009 the firm may fluctuated position in the beginning year the satisfactory level of the firm is low and then it will recollect its position from the next four years it may got the better position the firm is satisfied. 38. During the year 2005-2009the net profit ratio of zuari cements is fluctuated in the year 2005 the capacity of the net profit ratio 5.2768 and then it decreases in 2006. in the year 2007 the firm got highest net profit ratio then the previous two years and again the nest two years2008 and 2009 it may some what decrease.. 39. Higher the operating expense ratio indicates in inefficient performance firm operation if operating excess increases the from losses their working capital in the zuari in the year 2005.the operating expenses ratio is 0.6982 and the remaining years i.e 20062009. the operating expenses ratio is decreases it indicates that the firm performance is well in their operations . 40. Higher the operating prfit ratio performance in zuari cement is increased rapidly from the year 2005-09 with 99.3018, 99.6440,99.6906, 996633,99.6643 from these the firm may satisfied with these operating profit ratio. 41. Wealth maximization is the one of the most important objective in the financial management in zuari cement a share holders equity is 2005-0.049,2006-0.052,20070.21,2008-0.462 increase and in the year 2009-0.396 the share holder equity will decreases 42. Higher the earning per share value is indicate well performance of firm operation from the year 2005-2009 the zuari cement earning per shares value is fluctuated
SUGGESTIONS
4. The Company should maintain minimum idle working capital and ultimately it reduces interest burden of organization and it will help to improve profitability of the organization. 5. It is suggested to company to maintain good relationship for creditors to pay the credits with in period. It helps to increase the funds by the creditors. 6. Better utilization of sources of funds is suggested for getting maximum benefits
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 2005 Rs in lakhs Particulars Income Sales (Gross) Less : Excise Duty Sales (Net) Other Income 39,889.97 7,284.81 32,605.16 419.40 33,024.56 35,851.44 6,830.29 29,021.15 236.60 29,257.75 2005 2004
Expenditure Purchase of finished goods for resale Manufacturing and other expenses Depreciation Interest and other finance charges Decrease in stocks of work-in-process and finished goods Loss before extraordinary item Extraordinary Item Compensation paid to employees under Voluntary Retirement and Others Scheme Loss for the year Working Capital Management - 74 207.49 2,104.92 2,747.91 92.77 34,921.99 1,897.43 459.71 32,005.66 2,747.91 1,574.29 28,082.30 2,839.05 2,333.38 155.08 25,591.08 2,839.05 2,949.46
Debit balance brought forward from previous year Debit balance carried to balance sheet 14,504.26 16,609.18 11,756.35 14,504.26
BALANCE SHEET AS ON 31st DECEMBER, 05 Rs in lakhs

Particulars 1. Sources of Funds : Share Capital Reserve & Surplus Loans Funds : Secured Loans / Funds Unsecured Funds Total 2. Application of Funds: Fixed Assets Gross Block (-) Dep. Net Block Capital work in progress Investments Current assets, loans & advances : Inventories Sundry Debtors Cash & Bank Balances Loans & Advances Current Liabilities & Provisions : Current Liabilities Provisions Net Current Assets 3,381.69 127.90 3,509.59 4,657.91 3,827.41 50.43 3,877.84 5,001.66 2,503.20 2,467.39 1,290.71 1,906.20 8,167.50 2,281.92 3,109.72 1,716.40 1,771.46 8,879.50 53,550.07 19,787.74 33,762.33 140.42 33,902.75 36,557.57 53,331.94 16,982.13 36,349.61 128.23 36,477.84 36,525.14 17,431.03 9,767.41 27,198.44 91,896.51 19,018.51 9,070.51 28,089.02 92,787.09 2005 42,796.14 21,901.93 64,698.07 2004 42,796.14 21,901.93 64,698.07
Miscellaneous Expenditure Profit and Loss Account Total
169.10 16,609.18 91,896.51
278.19 14,504.26 92,787.09
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 2006 Rs in lakhs Particulars Income Sales (Gross) Less : Excise Duty Sales (Net) Other Income 47,306.18 7,616.56 39,689.62 457.41 40,147.03 Expenditure Purchase of finished goods for resale Manufacturing and other expenses Depreciation Interest and other finance charges (Increase)/Decrease in stocks of work-inprocess and finished goods Profit / (Loss) for the year Provision for Tax Current Tax Fringe Benefit Tax -65.00 --(2,104.92) (14,504.26) 16,609.18 (244.60) 37,690.57 2,456.46 86.54 35,192.63 (1,897.43) 3,288.27 29,552.25 2,859.77 2,234.88 1,574.49 28,359.17 2,839.05 2,333.38 40,166.84 7,284.19 32,882.65 412.55 33,295.20 2006 2005
Profit / (Loss) for the year 2,265.11 Debit balance brought forward from previous (16,609.18) year Debit balance carried to balance sheet 14,344.07
BALANCE SHEET AS ON 31ST DECEMBER,2006 Rs in lakhs

Particulars 1. Sources of Funds : Share Capital Reserve & Surplus Loans Funds : Secured Loans / Funds Unsecured Funds Total 2. Application of Funds : Fixed Assets Gross Block (-) Dep. Net Block Capital work in progress Investments Current assets, loans & advances : Inventories Sundry Debtors Cash & Bank Balances Loans & Advances Current Liabilities & Provisions : Current Liabilities Provisions Net Current Assets Miscellaneous Expenditure Profit and Loss Account Total 3,758.62 289.62 3,922.48 6,803.46 67.10 14,344.07 89,896.69 3,38169 127.90 3,509.59 4,657.91 169.10 16,609.18 91,896.51 3,114.57 934.79 1,383.35 5,284.23 10,725.94 2,503.20 2,467.39 1,290.71 1,906.20 8,167.50 54,205.96 22,537.12 31,668.84 289.62 31,958.46 36,723.60 53,550.07 19,787.74 33,762.33 140.42 33,902.75 36,557.57 1,533.07 9,868.55 25,198.68 89,896.69 17,431.03 9,767.41 27,198.44 91,896.51 2006 42,796.14 21,901.93 64,698.07 2005 42,796.14 21,901.93 64,698.07
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DEC, 2007 Rs. in lakhs Particulars Income Sale of manufactured goods Less : Excise Duty Sale of traded goods Other Income Expenditure Cost of goods sold Personnel cost Other expenses Depreciation Amortisation of goodwill Interest and other finance cost Profit before tax Provision for tax - Current tax - MAT credit of earlier years - fringe benefit tax - deferred tax charge 36,172.58 3,604.81 25,119.28 5,204.23 1,7,99.20 950.93 72,851.03 28,360.18 6,542.84 (982.00) (713.59) 115.83 5,339.36 16,825.32 1,777.200 9,234.53 2,200.41 -871.49 30,908.95 13,444.82 982.00 28.00 12,434.82 (14,344.07) (1,909.25) Rs. in lakhs Working Capital Management - 78 1,16,900.24 17,521.32 99,378.92 1,832.29 1,01,211.21 47,905.48 6,388.76 41,516.72 2,404.44 432.61 44,353.77 2007(Amalgamated) 2006
Profit for the year 18,057.74 Debit balance in Profit and Loss account brought forward (1,909.25) Balance in Profit & Loss account carried 16,148.49 BALANCE SHEET AS ON 31st DEC 2007 forward
Particulars 1. Sources of Funds : Share Capital Reserve & Surplus Loans Funds : Secured Loans / Funds Unsecured Funds Deferred tax liability Total 2. Application of Funds : Fixed Assets Gross Block (-) Dep. Net Block Capital work in progress Investments Current assets, loans & advances : Inventories Sundry Debtors Cash & Bank Balances Loans & Advances Current Liabilities & Provisions : Current Liabilities Provisions Net Current Assets Profit and Loss Account Total
2007(Amalgamated) 2006 42,796.14 38,050.42 80846.56 4,168.45 12,286.48 5,659.63 22,114.29 1,02,960.85 42,796.14 21,901.93 64,698.07 6,760.49 8,943.65 --------15,704.14 80402.21
89,683.71 29,850,93 59,832.78 320,247.06 80,079.84 10,051.06 3971.01 2531.00 12012.16 8821.93 27336.1 131132.52 1373.63 14506.18 12,829.95 ----------1,02,960.85
53,811.03 24,043.25 29,767.78 3,453.60 33,221.38 42,083.62 2889.51 1866.11 1576.48 3442.81 9774.91 6020.09 566.86 6586.95 3,187.96 1,909.25 80402.21
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DEC, 2008 Rs. in lakhs Particulars Income Working Capital Management - 79 2007 2008
Sale of manufactured goods Less : Excise Duty Sale of traded goods Other Income Expenditure Cost of goods sold Personnel cost Other expenses Depreciation Amortisation of goodwill Interest and other finance cost Profit before tax Provision for tax - Current tax - MAT credit of earlier years - fringe benefit tax - deferred tax charge
116900.24 17521.32 99,378.92 1,832.29 1,01,211.21
137728.95 20207.11 117521.84 2,404.44 1807.18 119329.02
36,172.58 3,604.81 25,119.28 5,204.23 1,7,99.20 950.93 72,851.03 28,360.18 6,542.84 (982.00) (713.59) 115.83 5,339.36
46374.89 4030.09 29017.00 5377.68 1799.20 534.19 87133.05 32195.97 12881.45 60.00 518.20 19772.72 (16148.49) (35921.21)
Profit for the year 18,057.74 Debit balance in Profit and Loss account brought forward (1,909.25) Balance in Profit & Loss account carried 16,148.49 forward BALANCE SHEET AS ON 31st DEC 2008
Rs. in lakhs
Particulars 1. Sources of Funds : Share Capital Reserve & Surplus 2007 42,796.14 38,050.42 2008 42,796.14 57823.14
80846.56 Loans Funds : Secured Loans / Funds Unsecured Funds Deferred tax liability Total 2. Application of Funds : Fixed Assets Gross Block (-) Dep. Net Block Capital work in progress Investments Current assets, loans & advances : Inventories Sundry Debtors Cash & Bank Balances Loans & Advances Current Liabilities & Provisions : Current Liabilities Provisions Net Current Assets Profit and Loss Account Total 131132.52 1373.63 14506.18 12,829.95 ----------1,02,960.85 3971.01 2531.00 12012.16 8821.93 27336.1 4,168.45 12,286.48 5,659.63 22,114.29 1,02,960.85
100619.28 10342.31 14605.93 5141.16 15,704.14 130708.68
89,683.71 29,850,93 59,832.78 320,247.06 80,079.84 10,051.06
91539.87 36353.10 55186.77 71347.95 126534.72 5100.00 6071.35 2640.09 4773.47 10803.09 24288.00 22479.86 2734.18 25214.04 926.04 ------130708.68
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DEC, 2009 Rs. in lakhs Particulars Income Sale of manufactured goods Less : Excise Duty 120946.74 12218.19 108728.55 Working Capital Management - 81 137728.95 20207.11 117521.84 2009 2008
Sale of traded goods Other Income Expenditure Cost of goods sold Personnel cost Other expenses Depreciation Amortisation of goodwill Interest and other finance cost Profit before tax Provision for tax - Current tax - MAT credit of earlier years - fringe benefit tax - deferred tax charge
------796.30 109524.85
2,404.44 1807.18 119329.02
40613.42 4427.88 29052.66 5488.32 1799.20 424.13 81805.61 27719.24 11520.00 ------------16.45 781.16
46374.89 4030.09 29017.00 5377.68 1799.20 534.19 87133.05 32195.97 12881.45 60.00 518.20 19772.72 (16148.49) (35921.21)
Profit for the year 16963.95 Debit balance in Profit and Loss account brought forward (35921.21) Balance in Profit & Loss account carried 52885.16 forward BALANCE SHEET AS ON 31st DEC 2009
Rs. in lakhs
Particulars 1. Sources of Funds : Share Capital Reserve & Surplus Loans Funds : Secured Loans / Funds Unsecured Funds 43190.95 16251.30 10342.31 14605.93 2009 42796.14 74787.03 117583.23 2008 42,796.14 57823.14 100619.28
Deferred tax liability Total 2. Application of Funds : Fixed Assets Gross Block (-) Dep. Net Block Capital work in progress Investments Current assets, loans & advances : Inventories Sundry Debtors Cash & Bank Balances Loans & Advances Current Liabilities & Provisions : Current Liabilities Provisions Net Current Assets Profit and Loss Account Total
4364.00 181385.48
5141.16 130708.68
94463.86 43632.78 50831.08 101290.66 152121.74 16764.09 4378.43 3922.79 21081.89 7482.89 36866.00 19445.18 4921.17 24366.35 12499.65 ----------181385.48
91539.87 36353.10 55186.77 71347.95 126534.72 5100.00 6071.35 2640.09 4773.47 10803.09 24288.00 22479.86 2734.18 25214.04 926.04 ------130708.68
BIBLOGRAPHY
The following books have referred during the preparation of this project: I.M. pandey - Financial management, Prasanna Chandra- Financial management Reports Annual reports of zuari cements Ltd (From 2003-04 to 2007-2008)
WEBSITE
www.zuaricements.com

A Project On Working Capital Management or Fund Management

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EXCUTIVE SUMMARY INDUSTRY PROFILE

Need For The Study

Objective Of The Study

Working Capital Management -1-

The data collection includes:

Working capital turnover ratio Working Capital Management -2-

Working Capital Management -3-

Working Capital Management -5-

CAPACITY AND PRODUCTION:

RECOMMENDATIONS ON CEMENT INDUSTRY:

OUR APPROACH: We are local, we think global

OUR WAY OF WORKING: Technological leadership is our goal,

OUR SPIRIT: One team worldwide.

DIFFERENT TYPES OF CEMENT:

ORDINARY PORTLAND CEMENT:

PORTLAND POZZOLONA CEMENT:

Working Capital Management - 10 -

PORTLAND BLAST FURNACE SLAG CEMENT (PBSFC):

RAPID HARDENING PORTLAND CEMENT:

Water proof cement

CEMENT INDUSTRY INDIA OVERVIEW

CEMENT INDUSTRY: STRUCTURE

Major cement plants

Mini cement plants

AVERAGE MAXIMUM RETAIL PRICE Delhi

CAPACITY DISTRIBUTION AND CONSUMPTION NORMS Process

Ready mix concrete: Industry

Companies planning to enter this Market.

Future out look

History of zuari cements:

Working Capital Management - 19 -

Joint venture with Ital cement

Location of the plant:

Massive (MT) grade limestone 108442 29530

Flagged stone(MT ) 9.894 2540

Working Capital Management - 22 -

Working Capital Management - 23 -

Quality customer service

A wide range to address every need:

Quality customer service:

Working Capital Management - 24 -

Zuari Superfine Cement

Zuari 43 Grade Cement

Zuari Superfine P53 Cement

No.1, 10th Main hall III stage, Jeevanbima Nagar Bangalore.

Working Capital management Introduction

CONCEPTS OF WORKING CAPITAL

GROSS WORKING CAPITAL

NET WORKING CAPITAL

KINDS OF WORKING CAPITAL

PERMANENT WORKING CAPITAL

TEMPORARY WORKING CAPITAL:

NEED FOR WORKING CAPITAL

THE WORKING CAPITAL CYCLE (OPERATING CYCLE)

Financing of working Capital

Sources of Working Capital

Spontaneous Financing Trade Creditors Outstanding Expenses

Conservative Working Capital Policy:

Aggressive Working Capital Policies:

COMPOSITION OF WORKING CAPITAL

List of current assets:

Working Capital Management - 32 -

LIST OF CURRNET LIABILITIES: